As PG&E Corp. plunged into bankruptcy last month, S&P Global Ratings slashed credit grades almost to junk status for California's two other big electric utilities, owned by Sempra Energy and Edison International, and said they could go lower.

The reason: inverse condemnation. Under the state's view of this legal doctrine, utilities can be held liable for any fires sparked by their equipment, even if they follow every safety rule. With deadly blazes getting bigger and more common, California's two remaining big power companies could be just one fire away from ruin. Now they're urging lawmakers to do something about it, and fast.

"This is a really serious issue that could absolutely impair the health of utilities in this state," Pedro Pizarro, Edison's chief executive officer, said in an interview. "I don't want to speculate about bankruptcy, but this is serious. And the current approach is just not sustainable."

So far, a fix has proved elusive. But there are potential routes out of the morass.

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